New York State Seal
STATE OF NEW YORK
INSURANCE DEPARTMENT
25 BEAVER STREET
NEW YORK, NEW YORK 10004

David A. Paterson
Governor

Eric R. Dinallo
Superintendent

The Office of General Counsel issued the following opinion on April 4, 2008, representing the position of the New York State Insurance Department.

Re: Reproduction Cost of a Magnetic Resonance Imaging (“MRI”) Film Necessary to Verify a No-Fault Insurance Claim

Question Presented:

How much may an assignee health service provider charge an automobile insurer for a copy of an MRI film that is necessary to verify a no-fault insurance claim?

Conclusion:

When an automobile insurer requests MRI films that are necessary to verify a no-fault insurance claim from an assignee health service provider, and the provider furnishes satisfactory reproductions in lieu of the original films, the provider may, consistent with Ground Rule 8 of the New York State Workers’ Compensation Radiology Fee Schedule, charge the automobile insurer five dollars for the first sheet of duplicating film or the first compact disk (“CD”), and three dollars for each additional sheet of film or CD. If the assignee health service provider furnishes the original MRI films, then the provider may not charge the automobile insurer a fee for the films, and the automobile insurer must return the films to the provider within twenty days of receiving them, if the provider so requests.

Facts:

The inquirer states that ABC MRI, P.C. (“ABC”), a health service provider that has received an assignment of benefits from an eligible injured person, has requested that an automobile insurer pay ABC two hundred dollars for a copy of an MRI film that the automobile insurer needs to verify a no-fault insurance claim. The inquirer asks whether such charge is permissible under New York law.

Analysis:

Every applicant for no-fault insurance benefits must provide the insurer with “written proof of claim.” See Office of General Counsel (“OGC”) Opinion 01-10-03 (Oct. 5, 2001). N.Y. Ins. Law § 5106(a) (McKinney Supp. 2007) sets forth the statutory basis for this obligation, and states in pertinent part that “payments of first party benefits and additional first party benefits shall be made as the loss is incurred. Such benefits are overdue if not paid within thirty days after the claimant supplies proof of the fact and amount of loss sustained….” (Emphasis added.)

Furthermore, every automobile liability insurance policy must set forth provisions that provide minimum first-party benefits equal to those set forth in the “mandatory personal injury protection endorsement” established by § 65-1.1 of N.Y. Comp. Codes R. & Regs. tit. 11, Part 65-1 (2001) (Regulation 68-A). Of particular importance is the “proof of claim” provision, which reads in relevant part as follows:

Proof of Claim; Medical, Work Loss, and Other Necessary Expenses. In the case of a claim for health service expenses, the eligible injured person or that person’s assignee or representative shall submit written proof of claim to the Company, including full particulars of the nature and extent of the injuries and treatment received and contemplated, as soon as reasonably practicable but, in no event later than 45 days after the date services are rendered…. (Emphasis added.)

Thus, the “proof of claim” provision requires the eligible injured person or the eligible injured person’s assignee or representative to supply the insurer with written proof of claim, including the nature and extent of the eligible injured person’s injuries, and the treatment received or contemplated.

An insurer also is entitled to additional information to verify the no-fault insurance claim. 11 NYCRR § 65-3.5(c) (Regulation 68-C) governs claim procedures, and states that “the insurer is entitled to receive all items necessary to verify the claim directly from the parties from whom such verification was requested.” Therefore, an insurer is entitled to receive proof of a no-fault insurance claim, and all additional information necessary to verify the claim.

The inquirer asks what fee, if any, an automobile insurer must pay for a copy of an MRI film. While the Insurance Law and the regulations promulgated thereunder are silent as to whether an insurer must pay a fee for such information, the New York State Insurance Department (“Department”) has adopted the New York State Workers’ Compensation Board’s (the “Board”) fee schedules pursuant to 11 NYCRR § 68.1 (Regulation 83).1 Such fee schedules set forth fees for reproductions of recorded images, which apply to no-fault insurance claims.

Insurance Law § 5108(a), which pertains to limits on charges by providers of health services, states that:

The charges for services specified in paragraph one of subsection (a) of section five thousand one hundred two of this article and any further health service charges which are incurred as a result of the injury and which are in excess of basic economic loss, shall not exceed the charges permissible under the schedules prepared and established by the chairman of the workers’ compensation board for industrial accidents, except where the insurer or arbitrator determines that unusual procedures or unique circumstances justify the excess charge.

Therefore, health service charges for, and in excess of, basic economic loss2 cannot exceed the charges permissible under the Board’s fee schedules. Furthermore, health service providers are prohibited from demanding or requesting any payment for services in excess of permissible charges. See 11 NYCRR § 68.0(f).

Ground Rule 8 of the New York State Workers’ Compensation Radiology Fee Schedule (“Ground Rule 8”) entitled, “Reports and Custody of X-Rays and Other Recorded Images,” states in relevant part that:

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Films or other recorded images shall be preserved for at least six years (but in no case shall they be destroyed without a report of the findings of such images being filed as a permanent record). They (or satisfactory reproductions) shall be made available to the attending physician, insurance carrier, or self-insured employer. When requested, carriers and self-insured employers shall return original films to the physician within 20 days of their receipt.

When a carrier or self-insured employer requests x-rays and satisfactory reproductions are furnished in lieu of the original films, a fee of $5.00 may be charged for the first sheet of duplicating film and $3.00 for each additional sheet of film. These reproductions are not returnable to the physician. Copies of images produced by copiers (e.g., Xerox) shall not merit any additional payment and shall not be returnable to the physician; such copies should accompany the bill submitted for the particular imaging procedure. (The use of photographic media and/or imaging is not reported separately but is considered to be a component of the basic procedure.)

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The Special Counsel to the Chair of the New York State Workers’ Compensation Board advised the Department's Office of General Counsel that the Board has adopted the American Medical Association’s (“AMA”) Current Procedural Terminology (“CPT”) coding and descriptions. The Special Counsel further stated that “as AMA CPT 2006 classifies MRIs as diagnostic Radiology, they would be subject to Ground Rule 8 and the cost of reproducing an MRI would be limited as set forth in said Ground Rule.”

Thus, pursuant to Ground Rule 8, when an automobile insurer requests MRI films that are necessary to verify a no-fault insurance claim from an assignee health service provider, and the provider furnishes satisfactory reproductions in lieu of the original films, the provider may charge the automobile insurer five dollars for the first sheet of duplicating film, and three dollars for each additional sheet. It is also the Department’s understanding that, pursuant to the Board’s interpretation of Ground Rule 8, if the assignee health service provider provides a copy of an MRI on a CD, then the provider may charge an automobile insurer the same fee that it may charge for a sheet of duplicating film – i.e., five dollars for the first CD, and three dollars for each additional CD. If the assignee health service provider furnishes the original MRI films, then the provider may not charge the automobile insurer a fee for the films, and the automobile insurer must return the films to the provider within twenty days of receiving them, if the provider so requests.

In the situation about which the inquirer asks here, ABC is prohibited from demanding or requesting that the automobile insurer pay two hundred dollars for a copy of an MRI film or an MRI on a CD, as two hundred dollars exceeds the permissible charge under Ground Rule 8, and is clearly excessive and unreasonable when compared to the permissible fee set forth in Ground Rule 8. ABC only may charge the automobile insurer five dollars for the first sheet of MRI duplicating film or the first CD, and three dollars for each additional sheet or CD. If ABC furnishes the original MRI films, then ABC may not charge the automobile insurer a fee, and the automobile insurer must return the original films to ABC within twenty days of receiving them, if ABC so requests.

For further information, you may contact Assistant Attorney Joana Lucashuk at the New York City office.

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1 11 NYCRR § 68.1(a) states that “the existing fee schedules prepared and established by the chairman of the Workers’ Compensation Board for industrial accidents are hereby adopted by the Superintendent of Insurance with appropriate modification so as to adapt such schedules for use pursuant to the provisions of section 5108 of the Insurance Law.”

2  See Insurance Law § 5102(a) for the definition of “basic economic loss.”